Investing in Africa: A sustainable means to end aid dependency

Three big trends stand out when reflecting on international aid to Africa in recent years. The first trend is the notable successes in key health indicators: particularly HIV incidence, malaria-related deaths and child mortality — in large part the result of international funding. The second is that aid has come under increasing attack for the perverse effect it can have on the building of viable and accountable institutions. The third trend is that regardless of the positive or negative impact of aid, Africa is abundant with new confidence, and stronger governments, entrepreneurship, new international relationships and private sector investment are rightfully sidelining traditions of aid dependency.

To those concerned with aid and development in Africa, these three trends pose interrelated opportunities and challenges. To sustain the positive impact on diseases and mortality there will need to be more strong institutions, these institutions are unlikely to be stable or independent while dependency on aid remains high, meaning that somehow they need to integrate financially into the emerging opportunities presented by more effective government, regional bodies, private sector growth and active citizenship.

This transition will not be easy or smooth. Many aid and development institutions in Africa are in their third or fourth decade of aid dependency, and no one really knows how or if their services would continue if foreign influence and funding were withdrawn, or what purely local leadership and funding would choose to prioritize. There is an understandable reluctance to risk people’s lives to find out.

Agencies providing international aid are committed to “do no harm,” but in the long run, aid dependency does just that. It undermines local incentives for resource mobilization by offering easier routes to finance. It reduces the need for institutions to worry about local accountability as their financial power comes from abroad. It stifles local initiative and ownership in favor of international donor priorities.

These challenges were diagnosed decades ago, and capacity building has never been off the agenda, but incentives for change were often shallow as the status quo held perks for both the donor and recipient institutions. Of late, however, we are seeing growing resistance against the donor-recipient paradigm, and it is coming from African institutions themselves.

Between Oct. 19and 21in Addis Ababa, the largest network of humanitarian institutions in the continent, the African Red Cross and Red Crescent Societies, will be engaging with these issues under the theme “Investing in Africa,” and promoting major shifts in the shape and nature of the aid architecture in which they have long been located.

The first shift is in financial backing of African aid institutions, with a renewed emphasis on partnerships with government, regional bodies, the private sector and local communities, to root financial and institutional accountability in its local context. Progress in this area will be country-specific, but for large parts of the continent, with resolved conflicts and growing economies, it will be increasingly possible to move in this direction. The fact that Kenya Red Cross Society raised $10 million from local donations in 2011 is testament to the potential.

The second shift is to further consolidate country-level ownership of the international aid and development agenda, in line with last year’s High-Level Forum on Aid Effectiveness in Busan, South Korea. The idea of country ownership is widely endorsed but it moves against the tide of multiple donor agendas that shape aid allocations before they arrive at a country-level. If ownership is to be strengthened it needs to happen at the recipient end by having the confidence to attach conditionality to the sort of aid that will be accepted and a commitment to be contractually compliant.

All this will work better if we make a third shift to look at nonemergency aid as a form of investment into sustaining development work at a national level. This implies a mutual responsibility: The investee needs to provide assurance of the security of a return — that institutions will get stronger and that resources can be raised nationally, and the investor needs to focus on the long journey of building the capacities needed to achieve that return — people, management systems and technology.

Again, this is not easy, because it introduces the rigor of investment security over the good-hearted faith and relationships that have been the basis for much institutional aid. Yet this rigor only reflects the growing stature and responsibilities of African institutions located in some of the fastest growing economies in the world.

It will still be a balance for a long time — for the foreseeable future urgent humanitarian needs in much of Africa will require immediate international support, but the immediate action should not undermine the long-term plan. The long-term plan should be to support institutions able to sustain development and humanitarian action autonomously at a national level. Long term, institutions require more investment and less charity to thrive.

About the author

Bekele Geleta has been the secretary-general of the International Federation of the Red Cross and Red Crescent Societies since July 2008. Bekele has held various positions within the Red Cross, from serving as secretary-general for the Ethiopian Red Cross to leading IFRC’s delegation in Southeast Asia. He was general manager of international operations at the Canadian Red Cross prior to his current appointment.

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